Author Topic: Are incentives backfiring?  (Read 3052 times)

priuspilot

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Are incentives backfiring?
« on: December 01, 2012, 02:37:29 PM »
As a Prosper investor, I pumped much more money into my account when the 3% and 2% deals were being offered at the end of October and through November. Now I find myself waiting on the sidelines for the next incentive. Just curious as to what people's thoughts on this were.

nonattender

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Re: Are incentives backfiring?
« Reply #1 on: December 01, 2012, 04:50:25 PM »
I deployed ~10k last month.  My read of decreased origination volume + increased listing volume is that capital is spread out over more loans, ergo, fewer loans are receiving enough investment to fund.  I expect this to clear up as the S1 becomes effective / BRE goes live, which seems imminent.  I think the incentives were intended to try to keep origination volumes up as many wait on sidelines for the S1.

I wouldn't expect to see more incentives unless the S1's effectiveness is delayed...
A little nonsense now and then is relished by the wisest men.

priuspilot

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Re: Are incentives backfiring?
« Reply #2 on: December 01, 2012, 11:11:16 PM »
I deployed ~10k last month.  My read of decreased origination volume + increased listing volume is that capital is spread out over more loans, ergo, fewer loans are receiving enough investment to fund. 

That's a good point. I'm guessing this glut of notes is a good thing, as people will be able to select higher-quality notes. More borrowers will be turned away but default rates would go down, which is good for Prosper's bottom line as more payments made/less overhead on collection are a positive.
« Last Edit: December 02, 2012, 08:15:45 AM by priuspilot »

nonattender

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Re: Are incentives backfiring?
« Reply #3 on: December 02, 2012, 10:41:48 AM »
I deployed ~10k last month.  My read of decreased origination volume + increased listing volume is that capital is spread out over more loans, ergo, fewer loans are receiving enough investment to fund. 

That's a good point. I'm guessing this glut of notes is a good thing, as people will be able to select higher-quality notes. More borrowers will be turned away but default rates would go down, which is good for Prosper's bottom line as more payments made/less overhead on collection are a positive.

Nah, I think Peter's EOM blog post had it right, that it's a signal that capacity constraint (lack of borrower supply) has been figured out, but that Prosper now needs to expand its investor pool (either in individual breadth or institutional depth - or both).  Many of my notes that haven't quite reached high enough funding to originate have been of relatively high quality - but, there are so just so many notes.
A little nonsense now and then is relished by the wisest men.